Gas Prices Keep Rising. Is There Any Relief in Sight?
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What is the main topic discussed in this episode?
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Why are U.S. gas prices up 30% year‑over‑year and where does the episode start?
Here's your money briefing for Wednesday, March 24th. I'm J.R. Whelan for The Wall Street Journal. If you've pulled up to the gas pump over the past few weeks, you've certainly felt the sticker shock. Prices are up significantly.
Normally, one would expect consumers to start to change their driving habits to try to cut back on the amount of fuel they buy as prices approach about $3 a gallon. But the question is whether that pattern will hold this year.
Coming up, our markets reporter Joe Wallace will discuss why gas prices have risen so much so fast and what to expect as the summer driving season approaches. That's after the break.
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What immediate causes — like refinery outages and storage drops — explain the rapid spring surge in gasoline prices?
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Gas prices in the U.S. hit an average of $2.88 a gallon this past week. That's up 30% from this time last year. And we haven't even hit the summer driving season yet. So why so much pain at the pump? And is there any relief ahead? Our markets reporter Joe Wallace is with us to explain. Joe, thanks for taking the time.
Thanks, JR. It's a pleasure to be on.
So, you know, the people whose job it is to update the price of gas on the big sign of the gas station, they've been getting quite a workout for the past couple of weeks.
How has crude oil price recovery and producer cuts contributed to higher pump prices?
So what's been driving up the prices so much so quickly?
Yeah, as you say, this is an unusual surge in gasoline prices in the spring. We'd normally expect prices to rise closer to the summer. And really, it's a combination of factors. One is that there's been a big drop in the amount of gasoline in storage around the U.S., That stemming both from the deep freeze that hit Texas in February, which knocked a lot of petroleum refiners, which convert crude oil into gasoline, out of action for a while. And it's also because refiners had already throttled back production significantly last year in response to the collapse in energy prices that made producing gasoline almost unprofitable at one point. And then the other factor driving up prices is simply the rise in the crude oil price, which has been fairly stunning.
If you remember just under a year ago, US crude prices fell below zero for the first time. They're now back at around $60 a barrel. And that's largely as a consequence of the production cuts, both by American crude producers in Texas and elsewhere, and also by Saudi Arabia, Russia, and other major international crude oil exporters.
And how about the timeline of where we are in the pandemic?
How did the pandemic timeline and vaccine rollout shape gasoline demand expectations?
How has that affected things?
So, so far, the recovery that we've seen in the gasoline price doesn't really reflect a massive surge in demand for gasoline by American drivers. But some analysts are expecting prices to keep heading higher because as the vaccines are widely distributed and restrictions on movement ease, they expect there to be a wave of driving activity heading into the summer as people, you know, are really chafing at the bit to get out of lockdown and that will drive up gasoline demand and prices.
So, you know, there are a lot of people still working from home, and they might need to fill up once every few weeks.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:00–0:30
2
Why are U.S. gas prices up 30% year‑over‑year and where does the episode start?
0:30–1:39
3
What immediate causes — like refinery outages and storage drops — explain the rapid spring surge in gasoline prices?
1:39–2:19
4
How has crude oil price recovery and producer cuts contributed to higher pump prices?
2:19–3:28
5
How did the pandemic timeline and vaccine rollout shape gasoline demand expectations?
3:28–5:40
6
Will drivers change habits as prices near $3 a gallon or will pent‑up demand push consumption higher?
5:40–6:38
Speakers
3 identifiedMore from WSJ Your Money Briefing
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